How Do Crises Lead to Change?: Liberalizing Capital Controls in the Early Years of New Order Indonesia

How do crises lead to change? Rationalist approaches to the question that emphasize inexorable structural responses and the pursuit of distributive preferences by newly dominant coalitions are inadequate because they obscure the social mediation of material events and the pervasive uncertainty that follows destabilization of the precrisis status quo. The latter constrains actors from fully grasping their distributive preferences. Until uncertainty is reduced, persuasion emerges as a key mechanism of change. Although constructivist approaches emphasize persuasive practices, they have yet to adequately specify the scope conditions underpinning the selection of new ideas. This article goes beyond much of the constructivist focus on domestic legitimacy and static notions of resonance by emphasizing external credibility and dynamic processes of resonance-building by norm entrepreneurs. The author specifies four features—what he calls the four Cs of crisis resolution—that shape the process of idea selection: carriers, composition, crossover appeal, and credibility. Developing these arguments in the case of the early years of New Order Indonesia, the article suggests that whenever a prominent and cohesive group of advocates promotes an idea that has sufficient ideational and distributive appeal and the endorsement of external actors whose seal of approval is perceived as important, intersubjective belief change, and thus institutional and policy change, is more likely.